Ryley asked me to look into the theory that the welfare system benefits companies by encouraging recipients to work part-time, minimum-wage jobs.

It turns out that the US doesn’t have welfare in the way we think of it in Canada. What they call “welfare” is the Temporary Assistance for Needy Families program, which, as its name implies, requires recipients to have children. In BC, there is no such requirement.

In 1996, President Clinton the First reformed the program as “welfare-to-work”. Normal recipients must participate in 30 hours/week of “work activities” if they’re single, a couple must total 55 hours/week. (“Work activities” = going to school, looking for a job, or working.) They can only collect TANF for 2 years consecutively and 5 years in their whole life.

Assuming that some of TANF recipients are working, TANF ensures that they can live off a less than liveable wage. The 2 year limit, which also applies in BC, encourages workers to get temporary or unsustainable jobs. So yes, welfare benefits companies.

But I don’t think welfare was designed to benefit companies. These limits are believably intended (misguided though it may be) to encourage people to get off welfare. Welfare is much less beneficial to companies than Employment Insurance, Medicaid, and negative income tax.